Question 1

The------shows the relationship between cash dividends and market price.

Accepted Answer

dividend yield

Question 2

Articles from current business periodicals should not be used in financial statement analysis as journalists are often biased.

Accepted Answer

While it is true that journalists may have their own perspectives and biases, articles from current business periodicals can provide valuable information and insights into a company's operations, industry trends, and economic conditions. However, it is important to use multiple sources and consider the reliability of the information presented in these articles.

Question 3

The------ratio is a broader measure of coverage capability than the times interest earned ratio because it includes the fixed payments associated with leasing.

Accepted Answer

fixed charge coverage

Question 4

Form 10-Ks and Form 10-Qs can be located through the Dun & Bradstreet Information services.

Accepted Answer

Dun & Bradstreet primarily offers business credit and risk management solutions, they do not offer access to SEC filings such as Form 10-Ks and Form 10-Qs. These filings can be found on the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database.

Question 5

________ratios measure the extent of a firm's financing with debt relative to equity and its ability to cover interest and other fixed charges.

Accepted Answer

The answer of ________ratios measure the extent of a firm's...

Question 6

The objectives of a financial statement analysis will vary depending on the perspective of the financial statement user.

Accepted Answer

Different financial statement users such as investors, creditors, and management may have different objectives for analyzing financial statements, such as assessing financial performance, evaluating creditworthiness, or making investment decisions.

Question 7

The------helps the analyst see how the firm's decisions and activities over the course of an accounting period interact to produce an overall return to the firm's shareholders, the return on equity.

Accepted Answer

The answer of The------helps the analyst see how the firm's...

Question 8

________ratios measure the liquidity of specific assets and the efficiency of managing assets.

Accepted Answer

The answer of ________ratios measure the liquidity of specific assets...

Question 9

The debt ratio considers the proportion of all stockholders' equity that is financed with debt.

Accepted Answer

The debt ratio considers the proportion of a company's total liabilities to its total assets. It does not directly involve stockholders' equity.

Question 10

Three ratios that help the financial analyst assess short-term solvency are the current ratio, the quick ratio and the cash flow liquidity ratio.

Accepted Answer

This statement is true. The current ratio, quick ratio, and cash flow liquidity ratio are all commonly used to evaluate a company's ability to meet short-term obligations.

Question 11

________ratios measure returns to stockholders and the value the marketplace puts on a company's stock.

Accepted Answer

The answer of ________ratios measure returns to stockholders and the...

Question 12

Financial ratios are powerful tools due to the fact that standard definitions exist and there is a set standard that should be met for each ratio.

Accepted Answer

Financial ratios are powerful tools for analysis, but there is no single set standard that should be met for each ratio as the ideal values can vary widely depending on the industry, the economic environment, and the specific company's strategy.

Question 13

________ratios measure a firm's ability to meet cash needs as they arise.

Accepted Answer

The answer of ________ratios measure a firm's ability to meet...

Question 14

A------statement contains useful information about the board of directors and executive compensation, option grants, audit-related matters, related party transactions and proposals to be voted on by shareholders.

Accepted Answer

The answer of A------statement contains useful information about the board...

Question 15

Supplementary schedules, such as data related to the breakdown of key financial figures by operating segment, are helpful to financial statement analysts.

Accepted Answer

Supplementary schedules, such as segment reporting, provide additional information that can enhance financial statement analysis by providing a more detailed breakdown of a company's activities and financial performance by business segment.

Question 16

The accounts receivable turnover, inventory turnover and accounts payable turnover ratios are mathematical complements to the ratios that make up the cash conversion cycle.

Accepted Answer

The cash conversion cycle is comprised of the accounts receivable turnover, inventory turnover, and accounts payable turnover ratios, therefore they are complimentary to each other.

Question 17

The------ cycle or------cycle is the normal operating cycle of a firm that consists of buying or manufacturing inventory, selling inventory and paying accounts payable and collecting accounts receivable.

Accepted Answer

The answer of The------ cycle or------cycle is the normal operating...

Question 18

________financial statements are projections of financial statements based on a set of assumptions regarding future revenues, expenses, level of investments in assets, financing methods and costs, and working capital management.

Accepted Answer

The answer of ________financial statements are projections of financial statements...

Question 19

A creditor is ultimately concerned with the ability of a firm to generate profits.

Accepted Answer

A creditor is primarily concerned with the ability of a firm to repay its debts, not necessarily its ability to generate profits. While profitability is a factor in a company's ability to repay debts, it is not the only consideration. A creditor may also be interested in a company's cash flow, assets, and overall financial stability.

Question 20

Tools used in a financial statement analysis should generally include common-size financial statements, key financial ratios, trend analysis, structural analysis, and comparison with industry competitors.

Accepted Answer

These are commonly used tools in financial statement analysis.

Quiz 5: The Analysis of Financial Statements